Request any senior consultant about the change on the client side and he will tell you that a lot has changed. In the late 80s consultants had to run around making sales pitches to an Indian firms, trying to tell them what consulting is about. In the 90s companies started recognising the work of consultants. Now the outlook has totally changed, and so have the aspirations. With trial and error, the companies have also become smarter buyers, and understood ways of squeezing the most out of the consultants.
The days of merely writing reports and making grand presentations are long over. If the brief is tight and the team on the project is good, the consultants definitely bring in a lot of value opine most CEOs of major Indian conglomerates. The value and relevance of consulting has clearly gone up in the eyes of the client.
With companies raking in the big money and the promoters happy with the enterprise value explosion during the bullrun, the Indian businesses didn’t mind the high fees most of the blue chip suits quoted – a big change from the penny pinching ways of the early days. International Consultants are charging near global rates in most sectors for Indian clients. But Indian consulting firms’ still charge rates that are usually 20-40 % lower than the global rates in most sectors, whatever the consultants may admit to.
Another element that aided in the remarkable turn around was the quick reaction of the firms. Sensing a kill, consulting firms were quick to scale up. Mckinsey was the only one that had critical mass in 2002, so the others had to do a lot of catching up. Mckinsey grew its team to 300 consultants, including 30 partners, eight directors and almost 50 imports from a setup of 120 odd consultants and 2 directors in 2004. Besides the premier B-schools it’s even hiring from the IITs, law schools and medical colleges.
The second largest firm, BCG, grew its team to 175 consultants including 15 partners, from 40 odd consultants in 2004. This year alone, the firm picked up between nearly 50 students from the B-schools . Accenture, on the other hand, is employing a different technique; it’s hiring aggressively from the industry and training them to become consultants.
The firms have also smartly built new capabilities to tap the opportunity. Mckinsey, for one, has built a new operations practice and a leadership practice and is doing extensive research on issues that affect Indian businesses to get insights into them some thing that can be monetised later. BCG beefed up its practice in areas like healthcare where it was weak and also some new emerging areas like M&A.
Whereas, IBM’s consulting division has started to invest in industry templates that are a collection of practices structured in a SAP environment to jump-start a project. Accenture in last two years has added systems integration to its management consulting expertise.
The consulting market is now fragmented and that’s helped the bigger firms in getting better value for their work. Clients don’t provide fuzzy briefs to consultants, and are quite clear about their strengths and weaknesses. The clients adjust to the firm’s style now. They know some firms work with the CEO and some firms want the organisation to be taken along.
The strategy and large transformation projects mostly flow to the big ones, while risk-related and implementation projects go to consulting divisions of accounting firms, and IT implementation projects go to players like IBM and Accenture. Each one touts its strengths. Strategy players say valuable independent actionable advice is the key, while others point at their implementation strengths. It is not about paper reports anymore. IBM now brings in the implementation discipline that a full service firm brings.
Foe another global consultant, with the consultants flooded with work and raking it in, the global HQs have also started taking notice. So, the India plans are being firmed up aggressively and any call for help or resources are heeded fast and that’s helping firms to build teams with expertise. The root of the matter is that in the last four years they have been focusing on their India capabilities more on serving rest of the world. Now they focus in changing and are looking at servicing Indian markets. —